Why the NHS injury cost recovery scheme needs urgent reform

The NHS spends millions of pounds covering the cost of treatment for people injured by someone else’s negligence because of pivotal problems with the NHS Injury Cost Recovery scheme.

Insurers should bear full financial responsibility for the harm caused by their policyholders who are negligent but the NHS is covering a significant proportion of treatment costs because they are not being recovered through the ICR scheme.

To put this into perspective, while treatment costs arising from road traffic collisions totalled an estimated £3.1bn in 2024, just 4% of these costs were recouped from car insurers.

Fundamental reform is needed, as there are several shortcomings to address.

It is no secret that injury claim volumes are falling in most areas, most notably in motor and employers’ liability.

Gordon Dalyell, Association of Personal Injury Lawyers

A cap on the amount the NHS can recover for treatment from at-fault parties, including motor and workplace insurers, is set at £64,856. 

Apil analysis of compensation recovery unit data found that if the cap did not exist, an additional £73m would have been generated for the NHS over the last three years. 

In 2025 to 2026 alone, the costs associated with almost 29,000 days of inpatient treatment were not recovered because of the cap, totalling £31m.

Tariff tackled

A daily tariff charge of £1,085 for the cost of inpatient treatment falls far short in some cases, as Apil members report that treatment costs for major trauma can be more than double the tariff amount. 

And when inpatient costs are recovered, the NHS is unable to recover any outpatient costs. In 2025 to 2026 there were 4,396 claims where the injured person received both inpatient and outpatient treatment.

The tariff level was originally set conservatively over concerns about the financial impact on insurers, which have since proven to be unwarranted. 

Because the current tariff is still based on these conservative figures, set in the late 1990s, the cost of treatment to the NHS has never been properly reflected in the sums.

Widening gap

The need for reform is pressing as there is an increasing divergence between the amount it costs the NHS to provide treatment to injured people and how much insurers contribute.

Insurer contributions have collapsed in recent years. The total amount recovered fell by 43% between 2013 and 2025 when inflation is taken into account, and this fall shows no signs of stopping. 

A significant fall in the number of victims of negligence claiming compensation is likely to have contributed to the drop in recoveries, as the NHS cannot recover treatment costs unless there is a claim. 

It is no secret that injury claim volumes are falling in most areas, most notably in motor and employers’ liability. 

Apil’s latest report, The Justice Gap Facing Victims of Negligence, sets it all out for any readers wishing to learn more.

Raising awareness

The answer to spending less on harm is always to reduce harm but there could also be greater awareness of victims’ right to claim redress. 

Furthermore, a lack of awareness of the ICR scheme within the NHS remains a problem, which will suppress how much is recovered.

Apil outlined the case for wholesale reform in its recent response to a Department of Health and Social Care consultation on a minor change which involves collecting the victim’s NHS number as part of the cost recovery process. 

This proposal will, to some extent, help increase the amount of NHS treatment costs that are recovered from those who cause harm and reduce the administrative costs.

Changes need to go much further to ensure that the NHS is recovering treatment costs in full, and that the taxpayer is not footing the bill for harm on behalf of insurance companies.